RSS
Twitter
Linked In
News In
Markets
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Morning markets: weather fears battle with EU debt jitters

Twitter Linkedin

The concerns over Europe's sovereign debt crisis, which hung over markets on Friday, made it through the weekend to depress sentiment at the start of this week too.

But so did the fears for the damage the weather is doing to world crop production prospects.

So while most markets started off on the back foot, with Tokyo shares closing down 1.5%, and Hong Kong stocks 1.9% lower in late deals, grains showed modest gains as of 07:30 GMT (08:30 UK time).

And this despite a

dollar

which shot up 0.9% against a basket of currencies, reflecting the weakness of the euro, which at one point fell to a record low against the Swiss franc.

On Friday, Fitch cut Greece's sovereign debt rating by (a further) three notches, adding that the country would need aid beyond 2013, while Standard & Poor's threatened to cut its outlook on Italy's rating to from "stable" to "negative".

'Quite stormy'

A stronger dollar would typically, of course, signal declines in commodities, making them more expensive to buyers in other currencies. And prices of many raw materials indeed sank, with

copper

falling more than 1% in London and New York

crude

dropping 2.3% to $97.85 a barrel.

But in Chicago,

corn

prices were protected by forecasts indicating that US farmers behind in sowings of the grain will not get much catch up done this week, after a weekend which bought more rain to areas already too wet to take heavy agricultural equipment.

"Things continue to look quite stormy and wet with large areas of significant rainfall and coverage for much of the central Plains and all of the Midwest," WxRisk.com said.

It does look like drier weather is on the horizon for the northern US, but not until early June, by which time many farmers may have given up on corn in favour of taking insurance or growing

soybeans

.

Corn vs soybeans

Indeed, while corn for July added 0.5% to $7.63 ½ a bushel, soybeans for the same month eased 0.3% to $13.76 ½ a bushel.

On the new-crop front, December corn added 0.1% to $6.67 a bushel, while November soybeans dropped 0.2% to $13.48 ½ a bushel.

Indeed, for soybeans, "slow [US] export and domestic demand, plus the threat of plantings delays for corn possibly shifting some intended corn plantings to soybeans, limits further upside price movement", Ker Chung Yang at Phillip Futures said.

Corn, meanwhile, had an extra fillip from US data on Friday showing placements on feedlots up 10% as of May 1, indicating buoyant demand for feed and a figure more than twice the rise that analysts had expected.

Disease worries

For

wheat

, while some dry [hard red] winter wheat crops have received a little rain, improving prospects, the inundations received in the Midwest are raising growing concerns over soft red winter wheat crops.

Dave Lehl at Benson Quinn Commodities clocked talk about "farmers applying fungicide in some of the soft red wheat areas that have been extremely wet hoping to combat head scab disease.

"How effective this will be won't be known for two to three weeks."

In Europe, where extreme dryness has been the issue, although Germany received some rain on Sunday, it was "not significant - 50% coverage of 0.10-0.50 inches", WxRisk.com said.

And while there is some rain due around the start of June which "could bring some rain into southern Germany and central and north eastern France, right now this does not look like a major event for these areas".

"Meanwhile the Ukraine and Western Russia stays extremely dry both in the 6-to-10 day and in the 11-to-15 day outlooks," the weather service added.

Rains in Aus

Chicago [soft red winter] wheat for July edged 0.1% higher to $8.07 a bushel, with harder varieties doing better.

Kansas hard red winter wheat added 0.3% to $9.36 a bushel for July, and 0.7% to $9.56 ½ a bushel for the September lot.

Minneapolis hard red spring wheat was up 1.2% at $10.12 a bushel for July delivery.

Besides the poor weather outlook for major northern hemisphere producing countries, is also worth noting improved conditions in Australia, following rainfall.

"About 10-50mm of much-needed rain was measured throughout the Western Australia wheat belt over the past week, and it is currently raining in New South Wales and southern Queensland," Luke Mathews at Commonwealth Bank of Australia said.

Still, "much more rain is needed across these regions".

Rubber loses tread

On other markets,

cotton

gained 0.3% to 156.04 cents a pound in New York for July delivery, and 1.7% to 121.75 cents a pound for the new crop December contract, again on US weather worries.

Prices were higher too on the Zhengzhou exchange in China, the top producer, consumer and importer of the fibre, where the November lot added 0.8% to 23,765 yuan a tonne.

However,

rubber

lost 2.3% to 369.50 yen a kilogramme in Tokyo for October, a trend that Mr Ker sees continuing, given Thailand's seasonal uptick in output.

"We expect rubber futures to soften on higher supplies available and expectation of softer demand from China," he said.

"While rubber availability may be limited in some areas, the market is expecting higher supplies as major producers emerge from low-production season."

By Agrimoney.com

Twitter Linkedin
Related Stories

Evening markets: South American double whammy brings ags back down to earth

Ags lose early gains, undermined by a tumble in Brazil’s real, and falling rain in Argentina. Still, wheat futures remain in positive territory

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains

Morning markets: Grains stage a recovery. Will it last?

Corn, soybean and wheat futures start Wednesday making headway which has been difficult to come by of late. Cotton gains too
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069